Strong results for DCC with sales up almost 10%

The business services group DCC has reported a strong set of results for the year to the end of March with sales up almost 10 per cent to more than €2 billion while pre-tax profits were 12 per cent higher on €97.7 million.

But anybody expecting any further enlightenment on the insider-dealing case taken against the company and its chief executive, Mr Jim Flavin, were disappointed with DCC making only a brief reference to the case. DCC repeated its contention that the Fyffes claim was "without merit and inconsistent with the share dealings, actions and statements of Fyffes and certain of its directors at the time" and promised the action "will be vigorously rebutted".

The results from DCC were mixed with strong growth in operating profits in the energy and food divisions, slower growth in healthcare and a fall in profits at the Sercom IT distribution operations. Overall, acquisitions accounted for about half the 9.6 per cent growth in sales, with the balance coming from organic growth. During the year, DCC spent more than €65 million on acquisitions while there was capital expenditure of €37.3 million.

Sales in the energy distribution division were up more than 17 per cent to €717.6 million with a 48 per cent jump in operating profits to €35 million. While turnover in the food business was only marginally higher at €184.2 million, operating profits jumped 30 per cent to €11 million.

In the healthcare division, sales were up 5 per cent to €192.5 million but there was only a 2 per cent increase in profits to €20.7 million. The results were affected by the disruption of supplies of one of its mobility products in the final quarter of the year after a manufacturer breached a supply agreement. DCC director Mr Morgan Crowe said that action had been taken to get supplies from other sources.

While turnover at Sercom was up 8 per cent to €813.8 million, the division's margins were squeezed and operating profits fell almost 2 per cent to €30.6 million. The results were generally in line with expectations. Shareholders are to get a 16 per cent increase in their dividend to 24.5 cents per share.